Overreaction to China threat could turn into McCarthyite Red Scare, says former US official
- Susan Shirk, who handled China relations in the Clinton administration, also warns that decoupling of US and Chinese economies could be ‘apocalyptic’
- She says ‘herding instinct is taking us off the cliff’ over perceived threats
Former US deputy assistant secretary of state Susan Shirk said overreaction to the perceived China threat in the United States “could turn into a McCarthyite Red Scare” and damage American interests.
She also warned that a decoupling of the US and Chinese economies could be “apocalyptic” and the United States might not win the fight because many countries may not side with it.
In what she described later as a “late night fear”, Shirk – who handled China relations in former president Bill Clinton’s administration – said worries about the “China threat” could result in a loss of talent and hinder US innovation development.
“Right now there is a herding instinct in the US that is taking us off the cliff with various forms of overreaction to China as a security threat, an intelligence threat, a spy threat, a technological threat, an influence threat,” Shirk said at the Yenching Global Symposium at Peking University in Beijing on Saturday.
“Many laboratories at my university depend on great Chinese students, and there are no substitutes for them right now,” said Shirk, now a research professor and chair of the 21st Century China Centre at the University of California San Diego.
“So if we make them feel unwelcome by not letting them work in the laboratories, they will go elsewhere. That would really slow down America’s own technological innovation.
“It could turn into an anti-China version of a McCarthyite Red Scare.”
With relations between Beijing and Washington strained over trade disputes and worries about China’s growing technology prowess, numerous Chinese international STEM students in the United States have reported delays and other problems in processing their visas since the US government tightened regulations for researchers in sensitive hi-tech fields last year.
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Shirk also said any attempt to decouple the world’s two largest economies would be “absolutely disastrous”.
“It could [lead to] deglobalisation and no country wants to choose between the US and China,” she said.
“Many countries won’t necessarily choose us. China is the largest trading partner of more countries in the world than the United States.So I have this apocalyptic vision of what could happen if they really tried to disentangle.”
China and the US are locked in a long-running trade battle that has cost billions of dollars in tariffs on both sides. Negotiations for a deal continue, but concerns about how it would be enforced and whether both sides would have the same understanding of any agreement signed are overshadowing the effort.
Overnight, Trump said negotiations were “going very well”, but added: “It’s going to have to be a great deal. If it’s not a great deal, we can’t do it.”
White House economic adviser Larry Kudlow earlier told CNBC that “we are still making great headway” with the talks.
In a recent report co-written by Shirk for the Asia Society’s Centre on US-China Relations, she and other writers urged the United States to change course and compete smarter with China rather than sever ties.
She earlier said that many of Beijing’s recent policies went against the values and interests of the US, in particular those helping its state-owned enterprises in order to pursue its goal of turning China into a hi-tech superpower.
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Speaking on Saturday, Shirk said China should make “bold moves” to reform.
“I think the key is fair competition for the international business community. If China can undertake bold moves, not just in the context of this trade negotiation ... things that would be good for China’s economy itself – opening up more sectors to foreign investment, the end of joint venture requirements – many officials appear to want to do that,” she said.
“Those economic steps – greater opening, more market orientation, SOE reform – basically go back to the third plenum document in 2013, which is really good,” Shirk said, referring to a Communist Party document promising a series of economic reforms. “And [what is required is] just actually act upon it.”
